limecookie said:
Hi, i was wondering if anyone can clarify the differences between accounting and finance? All i've heard is that finance is harder than accounting & apparently accounting has more to do with numbers than finance?
Can anyone tell me what the differences between the two majors are? Also, what are the possible career options?
Thanks
Are you serious? You're aiming to get into med. You're taking all science courses. I think even if you don't get into med you should maybe do a science course and try to transfer in....rather than do commerce.
I'll reply anyway in case other people find the info useful too...and i'm procrastinating like hell.
Accounting Major. Within this they will teach you two types of Accounting. Financial accounting and Management Accounting.
Financial- This is basically the accounting info that is compiled for external financial reporting. You are taught how to record the transactions of the company (sales revenue, expenses etc) and make them into reports such as Balance sheets and Income statements. This is stuff they make into booklets to send to shareholders to inform them of the company's financial position. I personally find this the harder accounting strand.
Management-This is accounting material that management use internally to manage the day to day operations. It's stuff like recording how much manufacturing, raw material and labour costs making a product will incur, and working out what price to sell it at. You also learn about calculating the cost of servicing customers and the costs associated with suppliers. All this info is collected and presented to managers to help them make decisions about pricing, marketing, controlling costs, and outsourcing.
Management acct is also alot of theory. Alot of casestudies on how businesses are run. I personally find it more interesting as this is actually helpful for anyone wanting to run their own business.
Finance Major-Finance is concerned with raising funds for companies and individuals. Apart from shares which is one way a company raises finances, there are other financial "instruments" such as options, bonds, debentures etc. There are therefore alot of formulas regarding the valuation of these instruments. How much each of them will raise and whether it is worth it to the company. Because holding shares and options etc is like gambling at times, you also have to learn formulas to assess the risk and learn how to neutralise risk by combining certain shares with bonds for eg.
Acct vs Fins
Acct and Finance will have its share of theory. Financial accounting especially will require you to memorise a whole bunch of accounting laws and regulations. You only need basic maths skills to work with the bumbers. You don't have formulas for financial acct, you have entire SYSTEMS of record keeping that you have to learn. It gets really hard when you have to merge the accounts of say 2 or 3 companies. It takes a hell of a lot longer to study because you will be doing pages and pages of practice before you actually get it. Once you get it however, you can prob do well in exams.
Finance is also hard because you won't get that much practice questions and the lectures and textbooks are little better than crap. You may get 6-7 questions per topic and that's it. It's not like hsc maths where you can practice with books and books. It may seem deceptively simple by just learning the formulas. But yeah you do have to really understand them to use them well in exams.
Finally and this is very important in my opinion....the school of Accounting and Finance are completely different. The Accounting lecturers and tutors are VASTLY better and more responsible than the Finance staff. Finance at UNSW is a joke. You have lecturers and tutors who barely speak english, and who answer questions wrongly if they even bother to answer you or understand you in the first place. It makes sense though. If you were really good at Finance you would be making big bucks working in banks rather than teaching. As one lecturer put it "as the saying goes, if you can't make it (in real life) pitch it".
Accounting is cushioned so much more because of the excellent teaching staff.
Oops-Career options
For Accounting most people apply for the big 4 auditing companies. Ernst and young, Price Waterhouse Coopers, Deloitte, and KPMG. Auditing is when you check the records of companies to check for accuracy and fraud. Then you sign them off and they can print and distribute them to shareholders. These companies don't just do audit work though, they also offer business consulting, tax and risk management services etc. But mostly the new graduates will go into auditing. From there people will most likely study part-time for 2-3 years to obtain a CA or CPA certificate. Then they leave for Finance firms or Consulting firms to make big bucks.
You can apply for individual firms to help them make financial statements or manage their internal processes.
With management accouting skills you can also become a management consultant but that's an area that is extremely hard to get into.
Or
For the smarter Finance/Acct graduates they start earning bigger bucks by getting graduate positions in investment banks in the first place. You can be an investment banker, Stockbroker, financial advisor etc. Or you can work for commercial banks.
Accounting is probably the more useful course out of the two. Even in Finance you will need to read the financial statements of companies to assess their profitability and growth potentials in order to decide which shares to buy.
There is really no set career path you can take. Employers know that virtually nothing you learn at uni is applicable anyway except for some basic theoretical concepts, so they provide training once you graduate.
In the end it really comes down to whether or not you want to work with numbers and money for the rest of your life.
